Shougang, a large domestic iron and steel company, has taken steps to expand into new industries. On June 28, the Fangshan base shock absorber factory of Jingxi Heavy Industry under Shougang was officially completed and equipment installation began. It is reported that the plant will supply shock absorbers to domestic automakers such as Beiqi Foton, and it is expected to produce 4 million shock absorbers per year. It is understood that Jingxi Heavy Industry has established a joint venture between Shougang Corporation, Baoan Investment Corporation and Fangshan State-owned Asset Management Corporation. In March of last year, Jingxi officially acquired Delphi’s global automotive suspension and brake business. In November of the same year, Delphi delivered five suspension and brake service plants, four technology research and development centers and 14 customer service centers to Jingxi Heavy Industry. At this point, Shougang Corporation formally involved in the production of auto parts. Zhu Jimin, chairman of Shougang Group, has publicly stated that the auto parts industry will become one of the pillar industries of Shougang in the future. The industry believes that Shougang's entry into the auto parts industry is not difficult to understand. On the one hand, China's steel industry has already entered the era of meager profits, and there is even a saying that "the profit rate is not as good as the interest rate of bank deposits." On the Other hand, the automotive industry has enjoyed a good momentum of development in recent years and the prospects for the parts and components market are tempting. Auto industry sources believe that the auto parts supplier's profit margin is about 10% to 20%. However, He Rongliang, an analyst at the China Circulation Productivity Promotion Center, believes that Shougang’s move is rather helpless. “Now the low profit rate in the steel industry is a fact, but it is difficult to acquire and horizontally hindered development. This is also an important factor for forcing Shougang to engage in a diversification strategy.†He said that Shougang is one of the few companies that have the most desire to acquire in domestic large steel plants. , Under a variety of reasons, touched a lot of "nails." "Shougang's move is conducive to extending its industrial chain and providing raw materials for the related holding companies." Hu Yanping, an analyst at United Metals, confirmed Shougang's entry into the auto parts industry. In her opinion, Shougang can also conduct technical research together with auto parts companies to improve the competitiveness of auto sheet products. In addition, with its own downstream companies, “it is also possible to avoid the volatility of domestic steel prices to a certain extent.†“Into the processing of parts industry, it feels like Shougang is separated from the steel industry.†He Rongliang believes that although processing and manufacturing are China's advantages, this is not a long-term solution. Processing and manufacturing industry is likely to have a downward trend in the future. “The development of Shougang’s project remains to be seen.†He Rongliang further pointed out that domestic steel companies can use this kind of industrial chain extension as a profit point to try, but "it should be better and stronger to focus on the main business." Weiye Machinery Equipments Co., Ltd. , http://www.xichengjixie.com